See also

Sources of help for invention

There
are very few sources of help for inventions and inventors. There are, however,
numerous sources of help for innovative small companies. Therefore, it may be
worth setting up a company to exploit your invention. As a company with an
invention at an appropriate stage of
development, you may then be eligible for some assistance.

(The
aim of your company can be either to make and sell a finished product, or to
develop the invention to the point where a larger company can invest in it or
license it from you.)

Raising
finance

Raising
finance for inventions is nearly always difficult but not impossible. The lower the risk to an investor, the
better your chances of getting funding. There are two basic types of
funding - and you may need them both:

‘Friends and family' investment. In the very
early stages of an invention, your only hope is likely to be comparatively
small amounts of money from people who (a) know you well and (b) are willing to
gamble that your idea will reward them well later for a small investment now.
Other investors are unlikely to be interested as there are too many ‘unknowns'
and so the level of risk is too high.

Formal investment. Larger amounts of funding may be
available once your invention has (a) reasonably assured prospects - perhaps
demonstrated by sales of actual product - and (b) a business plan (Part 7 ).

How much money do you need?

Many
inventors harm their chances of getting funding by asking for unrealistic sums
- and asking for too little can be
as unrealistic as asking for too much.

It is
important to calculate the cost of developing your invention as fully and
accurately as you can. This may not be easy, but anyone with experience of
assessing investment proposals will know immediately whether you have made the
effort.

It may
be helpful to seek a range of professional advice to identify all the costs
involved in developing a new product or technology. If you have never done it
before, it can be easy to miss or underestimate important cost headings.

You do
not have to cost everything to the nearest euro, but you do need to present
figures that someone with experience can look at and say, ‘Yes, that is about
right'.

For
example, a significant budget item may be the cost of patenting. This tends to
be fairly predictable over several years, so you should be able to get
realistic figures from your patent attorney.

It may be unhelpful to ask for money to
meet your living expenses. Many funders will see this as increasing
their risk while reducing yours. And if they think that you are not willing to
make sacrifices for your invention, they may question your commitment to it. If
you think some personal income is necessary, you must justify it in your
business plan.

Do you need external funding at
all?

The
aim of a business is to make money rather than spend money, so identify every
possible way of cutting your costs before concluding that you need external
finance.

For example, the
key to the success of many inventions is skilful
marketing. If you can get orders for your product before it is manufactured, you may not need any external funding.
Even if your orders are not paid for in advance, proof of those orders should
make it easier to get credit from your manufacturer or perhaps bank finance to
cover you until customers pay. And you could offer discounts to customers for
early payment.

Your profit may at
first be small, but (a) you will have launched your product successfully and
(b) you will have spent only what it cost to sell the product, rather than what it cost to make it.